Knowledge that Transforms

Jeffrey Cohen, Thomas Kida, The Impact of Analytical Review Results, Internal Control Reliability, and Experience on Auditors' Use of Analytical Review, Journal of Accounting Research, Vol. 27, No. 2 (Autumn, 1989), pp. 263-276

Information asymmetry, Reputation, Sunk costs , Escalation errors

Stanley Baiman, Barry L. Lewis, An Experiment Testing the Behavioral Equivalence of Strategically Equivalent Employment Contracts, Journal of Accounting Research, Vol. 27, No. 1 (Spring, 1989), pp. 1-20

Responsibility accounting, Principal-agent model, Performance, Hierarchical relationship

Financial reporting, Disclosures, Banking, Loan loss allowance

In this note it is argued that bankruptcy rules and credit constraints are intrinsically related concepts. Bankruptcy occurs because credit is constrained. By introducing the concept of a «consistent» credit rationing scheme, it can be shown that a temporary equilibrium exists if credit rationing is consistent and if lenders have more conservative expectations with regard to the borrower's future repayment capability than the borrower

This paper compares the equilibrium behavior and outcomes in a model of two-party competition for legislative seats under two different assumptions about the parties' goals: (1) parties maximize the expected number of seats won, and (2) parties maximize the probability of winning a majority of the seats. The two goals may lead to qualitatively different behavior, and studying the differences yields insights into the relationship between the goals, and the role of asymmetries between the parties.

Economic models with multiple equilibria are now so common in economics that we need a general framework for statistical inference in such models. This note offers a simple theoretical framework that can be used to organize the debate about the question of whether such a model is identified, and about the question of how much predictive content it retains

Uniform laws of large numbers (ULLNs) consider sums of the form: n −1 Σ t n =1 [q t (z t , θ)-Eq t (z t , θ)], where (z t ) denotes a stochastic data generating process that takes its values in a space Z, θ is an element of the parameter space Θ, and q t : Z×Θ→R. ULLNs provide conditions under which the above sum converges to zero uniformly over the parameter space. The purpose of the present note is to introduce a new generic ULLN. It maintains a set of assumptions that is relatively easy to verify and allows at the same time the analysis of a wide variety of estimators and models of interest in economics